Sunday, July 15, 2012

Saudi Salary Racism

In a previous post I wrote about the workplace bullying problem in Saudi-Arabia. It was mentioned how the salary disparity between different nationalities is at least partly to blame for this unfortunate phenomenon. Read that post here: http://www.blueabaya.blogspot.fi/2012/05/saudi-hospitals-bureaucracy-and.htmlThe wage system in Saudi-Arabia is completely based on color of the employees passport. This goes for all companies hiring foreign staff. My experience is from the nursing field so I will talk more about that specifically.
In most countries the nursing salaries are seen as too low compared to the education level and the actual job responsibilities and duties. The salaries will however usually increase as the nurse gets more experience and training over the years. In Saudi-Arabia on the other hand the staff nurse with only two years working experience and the one with 30 years experience plus additional training earn the same. There are no age or experience benefits and specializing in a field will only slightly increase the salary.

The only determining factor for the salary is the passport with which the employee is applying for the job. In fact, not even nationality matters.Take for example an Indian national who worked in Great Britain and obtained a British passport and dual nationality. He will naturally apply to work in Saudi with the British passport because of the much fatter paycheck.Some Asians (particularly Filipinos) knowing this, travel to Canada just to get the passport. It's the easiest country to obtain a passport from in just a few years. The expats then relocate to the Middle East, applying for the job as Canadians, this way multiplying their earnings.

To illustrate the gross salary disparity, I drew up a totally fictional salary table of nurses working in Saudi-Arabia. This table is in no way based on any official documents whatsoever and is completely made-up. I honestly don't even have the specific amounts in my knowledge. I have however during the years come to hear people talking about their salary and other's salaries and even seen some pay slips that had been left laying around in the staff room accidentally (or purposely?) to have a very generalized idea about it. There's plenty of info available online too.
Salaries of course vary from one hospital to another and there is a difference between private hospitals and government owned, with the latter paying higher salaries.

So basically the lowest paid are the Asian passport holders and highest salary goes to U.S. and Canadian passport holders. This system is said to be based on the standard of living in the home country of the employees. In other words, what the money will buy the employee back home and the cost of living and value of money in each country. It's also said to be based on the quality of the education that western vs. Asian nurses have.

For example a Filipino earns so much in the Kingdom she's able not only to live a very comfortable life there but also support her extended family back home and maybe even purchase a house and a car. The money the Filipino nurse earns in Saudi, although MUCH less compared to what their western colleagues are earning, will in comparison get them more back in their home countries.
On the other hand the American nurse, although she earns more than in the U.S, does not get a significant pay raise. Many are able to travel and save some money, maybe pay off loans but there is no way they could support others and make large purchases at the same time.

According to this source the starting salary for Indian nurses in their home country is 2300 rupees a month which is about 41 U.S dollars (150SAR). The maximum salary with all benefits would be around 5000 rupees, or 90 dollars. The estimated earnings of an Indian nurse in Saudi-Arabia, around 2500 to 4000 SAR is around 1000-2000 U.S dollars at the current exchange rate. That would add up to roughly 58,000 rupees. That's a staggering difference to what they earn back home.

Filipino nurses earn approximately 5000P a month back home in Philippines, which is about 450 SAR (120 U.S dollars).Anews articlefrom 2009 states Pinoy nurses salaries in government hospitals will be raised from 2550 to 3500SAR. If they earned the estimated 3500SAR a month in Saudi-Arabia that would be roughly 39,000P. That's almost ten times more than what they would earn in the Philippines.

Compare this to the European nurse. Say she earns about 2400 euros at home, minus taxes leaving her with about 1600 euros a month. That's roughly 7500 Saudi riyals, or if counted from the salary before tax cuts, 11,000. In Saudi her salary will increase about 30% from this. If the European were to get a comparative pay raise to the Asians, her salary would end up being something around 26,000 euros or 120,000SAR a month! Gasp.

By doing some more maths (which I suck at btw) I discovered that the Filipino who first went to Canada to get the passport, actually literally becomes a millionaire (but only in the Philippines) by just working a few years in the Kingdom!

Another interesting aspect is how the Saudi nationals themselves get lower pay than westerners. This is very strange to me. Why don't they value their own citizens more? Do they think Saudi employees are not as efficient or highly trained as the western nurses and thus don't deserve as much pay? I have to admit I hear many nurses complaining about the laziness or lack of training of the Saudi nurses.

Even though I understand partly why they thought up this kind of system in the first place and it does have some sort of rationale behind it, it still causes a lot of tension at the workplace. In the end of the day it IS unfair to pay one employee ten times more in Saudi riyals for the same job, just because of their nationality. The difference in salary causes tension and conflicts in the working environment and can potentially cause one nationality to hold grudges and feel jealousy toward another.So is there a solution to this salary racism? Could all employees be paid the same salary regardless of their passport color? If the wages went down significantly how would Saudi companies be able to attract western employees anymore? If employees from poorer countries started earning the same salaries as westerners in Saudi do, what would happen? An overwhelming influx of Asian employees? How about raising the Saudi's salaries in order to motivate them more? Would making the salaries more equal make the working environments more tolerable places for all nationalities to work harmoniously in?

If these salaries are based on the cost of living back home and education levels then why do some employees get paid according to their newly obtained passports? What about a Saudi or Asian employee who trained in the west? Or a western nurse that got their education from a third world country? This system seems to have so many loopholes and other negative aspects to it that I think at least some sort of reform could certainly do good for the Saudi workplaces.

48 comments:

Great Post Laylah I know I hate it bc my husband is a Saudi yet has a American degree that seems to hold no value since hes still a Saudi at the end of the day. People doing his same job or less that hold an American degree make more. I was even offered a job bc I am an American and I do not even hold a degree in that field making almost double what he does. Its not fair at all. I think the main person getting paid should be the Saudi if they are going to have any system at all.

My husband is Saudi and attained his PhD in Reading and ESL from the USA while on the Saudi scholarship. So in other words, KSA paid for my husband's education. But here's the kicker. When he returned to KSA to try to find a job in his field (this was in 1991) which was teaching English as a Second Language, he could not get a job here! Why? Because at that time, they only wanted native speakers of English. This makes absolutely no sense what-so-ever, does it? And now, there are such poor English speakers with bad accents teaching English here that the students cannot even understand the teachers. My husband's English is perfect, yet they wouldn't hire him back then. Some things are just so screwed up here...

@LaylahI also agree that the salary disparities could and does cause conflicts and that reform is needed. I'm not sure if there's any magic bullet to this issue. It's a sticky one.

I guess we'd have to look at how other countries are able to fair with regards to salaries based on education and skills no matter what one's nationality or color of passport. But here in America, we suffer from racism on another level.

The white male (may or may not have a degree or experience) still gets paid more than the black male (having a degree), white females (having a degree) and all others following. How that math is done, I have no Idea. It boggles the mind.

Maybe they'll all figure it out one day.

Out of curiosity, how is it in Finland? What's the pay scale for foreign workers? Are there any differences in pay based on job?

Nice post! I enjoyed reading it. I saw some of the links you have at the end of the article and I actually go and read news on those sites. lol

Anyway, I'm just wondering where did you get the conclusion that Filipino nurses become "millionaires" after a couple of years in KSA? Because I highly doubt they become one back there. Most of their salaries go to their families to help pay the bills or help a couple of siblings finish college (which is very expensive btw). So in short, they hardly save money for themselves. Their families' living improve there though, but in exchange for them leaving their families.

same salary differences based on passports exist in the UAE. My husband's cousin was a doctor and his salary was considerably less than of his western passport holders colleagues who actually graduated from the very same university as him! This Emirati doctor felt unappreciated and thought of migrating to Canada where his salary was higher than in the UAE.My husband is negotiating salary with a Dubai company and they say the salary he's asking is too high (for an Emirati), at the same time they pay much more to British citizens at the same position. Some say Emiratis are "cheap labor" in their own country comparing to western passport holders. Such discrimination seems unfair especially to well educated, skilled Emirati specialists.

If foriegners could live permenently in Saudi, and eventually become citizens, there would not be this problem, and there wouldn't be such apparant racial/national differnces in people in terms of the services they recieve from the goverment/employees.

My 2 cents. I believe there are several factors to take into account, in no particular order:

1. Should make sense economically - to provide the service without increasing the cost beyond the point they afford to support. They can afford to pay Asian nurses an attractive salary compared with the one from their own countries, but if they apply the same model to Americans they wouldn't afford to deliver the service;2. To give a proper signal - they want Western nurses, but they are not that desperate - they can get a good nurses for less the price of Westerners;3. The salary should be motivating enough to make the move. This is applicable especially for Westerners;4. There is chauvinist thinking among some of Saudis, judging people as good or bad based on their nationality. I don't think this reason prevail, but it works there, in the background;5. The lavish lifestyle of Saudis, which is visible all over the place. They are going to pay in a way which is allowing them to show their lavishness, but in the same time avoid being taken as desperate;6. The preference to work by procedure: working by evaluating the nationalities it is understandable. Judging the skills and making decisions - and the decisions for money are centralized in the hands of few people - this doesn't fit the style.

If there is differences in payments, as you said, is it bcoz the currency exchange and cost of living back home? As you stated, at SR3,500 a month, a Filipino can become a millionaire in 3 years (PHP1,413,583). But I wonder about the cost of living? In Indonesia, SR396 will make you a millionaire, but a book price there can cost ~RP50,000. So more research is good.

Anyway, not referring to this issue, I have seen how people say phrases like "cheap asian". But may I say that Prophet Joseph himself was sold at a cheap price. So I'm comforted:

بسم الله الرحمن الرحيمAnd they sold him for a reduced price - a few dirhams - and they were, concerning him, of those content with little. [Quran 12:20]

Thats the same here in Dubai, my husband gets lower sallary than European doing the same activity (hes local). Because they have the best university so your diploma will be much stronger and the cost of live there so expensive. Unable to pay 16000 to a filipino, the expenses in their country is low compared to american or european standart

Don't forget that Saudis have a retirement pension at 60 years old, while the foreigners haven't.In public hospitals the salary of the Saudi doctors is upper (20%/25%) to the salary of the European doctors.

I was shocked to find among the university(!) teachers (the American and Australian passport holders) people whose previous experience was related to whatever but not teaching. One of them was spell-checking the word "writer" because she was not sure about the suffix -er or -or)) The other was persistently saying "arrive to" and confusing singular and plural. Of course, it does a lot of harm because what can be more dangerous than ignorant educators?

Noor I agree it's sometimes completely absurd and really is not based on who is the most qualified person for the job!Saudis should get more other benefits such as housing and schooling and transport (especially for females) allowances!Compare to all those benefits the foreign workers get, free accommodations, transport, tickets home and back..

Susie-that is totally screwed up! it still happens though! And funny how they are not even that specific of the nationality of the so called native speaker. For example, I was offered a job as an english teacher (I have no experience or training whatsoever) to teach at a girls school in Riyadh, for about the same pay as I get from nursing..Because I have an american accent and I'm fluent, so they are hiring people JUST for the accent. I declined because I thought it was ridiculous!

We have some similarity in Finland to what you are describing, but the salary differences are nothing compared to the Saudi scale!The minimum wages are the same for every nationality, but you will find many foreigners (e.g Russians,Estonians,some of African origins) doing the lowest paid jobs and not so many Finns doing those jobs anymore. For example bus drivers, cleaners and so on.

Dianne-I meant they become millionaires in the sense that they earns millions counted in local currency :) NOT that they can live lives of millionaires! But sure they and their families do get better life from the earnings of those relatives who relocated to Saudi.

Alice-It's really unfair, and they should try to encourage the Emiratis/Saudis more. What they do now is almost humiliating, I mean they studied in same uni, that's just ridiculous. Companies should look beyond the passports and look at the actual CV's!

Hi there, yes what I meant with the millionaire thing is just that they would become such in their own currency, not that the person would actually be able to live the life of one..but certainly they would be better off, if we think that the average salary is 5000 a month, by which a person can live a decent lifestyle, then 1,5 million is a lot of money.Secondly, I stated that specifically those Filipinos who are getting paid by the Canadian passport become millionaires (they earn 200,000P a month so in a year 2,4 million pesos!)

But I have to say that the laws in Canada have changed and it is no longer as easy to get citizenship here. They have started cracking down on people coming to get one then going. If you stay out of Canada for so many years, now your citizenship can be stripped. They will give you a warning first, and you have six months to return to Canada for a set time or you will lose it. A bunch of nuns and some priests have lost theirs. I think where the first. The problem with many people is that they have not been paying taxes so when then are asked to return they have huge fines to pay. Also many people who just come for the passport do not realize what is really involved in becoming Canadian. Many have unrealistic expectations of what its like to live here and how easy it is to get here. Even marrying a Canadian now does not guarantee a way into Canada depending on where they are from. This is dew to a government crack down on the lack of a better word "green card" marriages. Though this has also effected many people who are honestly married.

Yeah, this is kind of sad you know. If only they get to keep the money for themselves so they could invest the money into something (some do). But for them, I guess it's ok that they don't get to live like millionaires from what they earn...however their consolation for that it they get to provide for their families.

You should try and interview a couple of them (not just nurses). Almost all of the news coming from KSA to PH is negative, unfortunately. I suggest you try and show both sides of their situations (good and bad). I could provide you some links regarding about the unfortunate events that Filipinos experience there. I'll try and find some positives too. Just let me know if you're interested.

Did not feel that the comment belongs to this discussion :)Also, I have to learn more about the topic to be able to discuss it. However, I do remember someone telling me that the salary gap according to nationality or race is a common thing in companies. It is taught in school business and a friend told me today that it is called: Race/Ethnic wage gap.

This Article is soo true layla .. thanks for highlighting it .. Westerners & Europeans are the highest paid people in this country whereas an Asian doing the same job for longer hours doesn't really count .

Nice post laylah...The sad thing though is American/European nurses who get high salary are not even doing the "dirty" work coz most of them are in administrative post and the one who are on the front line are those who are less paid. No offense to other nationalities, but Filipinos are hardworking nurses so it is just NOT FAIR why there is salary racism in KSA.

Very interesting post! At the end of the day everyone is paid more in the Kingdom than in their own countries so what's the point? I do not see no racism here. Indian rupee's value is not as great as euro or dollar that is why the Kingdom pay them more (but less than to Americans- very reasonable)in comparison so they can afford much more than if they were working in India. This system is actually very smart. why does everyone have to become a millionaire? Personally I would be happy to earn 50% more that I'm earning right now. I wouldn't care if my American friend earns more because at the end of the day I earn much more than in my very own country, I can save and spend the money in my very own country. Gosh ppl are so hungry for money! If its so unbearable in the Kindom there is always a solution: going back to homeland ;)

The figures vary much because contractors vary in how much they give to teachers of various nationalities. They always start low, and then if you negotiate hard, your salary can increase by 25 to even 50%.

It's a sad state of affairs to pay Europeans and Americans more. This is because most of them do not even go back or retire to Europe or America. They go to Sri-Lanka, and the Philipines where they get married and settle down. So, this makes them millionaire in the Philipines and Sri-lanka. I personally know English teachers who have villas in Sri-lanka and the Philipines and almost never visit the UK / US.

to be honest its mostly right . I'm a green passport holder i studied in AUS . and for whole 4 years of working i still get bad salary . i bet if i was married to one of my AUS friends and got the nationality . i would be in a different story and a way pleasant chapter .But things is done by faith and it have been written long time before i have born .

maybe i might get my hands on a great girl who will love me for who im and i will get her pleasant and she might change my whole life . who know !!?

I'm very glad I found your blog. Thanks for the sensible critique. I and my friends were just preparing to do a little analysis about this. I'm very glad to see such good information being shared freely out there.

I found this blog when someone set up a Twitter account to spam me links to here. The spamming is weird but I'm happy to have found you! I love to hear stories of foreign wives all over the world, we seem to have many issues in common. Nice to know that you are a working mom too, there are so few of us in my part of the world! Kudos!

Thank you for sharing your views on this topic. I have done some traveling to the middle east and while i've never had any communication with those who work in the medical field I have seen the different attitudes towards various races and pay. I'm really glad to hear you speak out about this and share your perspective.

This is a good post and you have presented it very well. I am from the IT sector and an Indian national. In the US, there would not be any difference between the hourly rates that an Indian or an American would earn. If at all there is, it would be very marginal and based on the fact that the Indian is on an H1 and so would settle for slightly lesser (but not greatly lesser). You feel respected in US and UK. There shouldn't be disparity in payscale for the same job. There are no unemployment benefits or social security in the third world countries; a 30-40 percent hike from Indian salaries would mean nothing because Indian salaries are too less/unfair and that can't be used as a yardstick in any case. By the way, i am from Kerala and lot of my fellow people get into nursing profession and hence the goodwill for them.

The truth is, American nursing education is unequaled globally. They spend millions upon the system for research and innovation. Not to mention that education cost is higher in the USA than anywhere else in the world, so those nurses better make the most money cause they have more to pay off and account for back home *student loans*.

I don't know if it's worth it anymore to come to Canada for citizenship. I am Canadian and it will take my American husband with two masters degrees six years to get full citizenship when all is said and done. Plus, if he gets his citizenship and takes off, they'll rescind it.

Also, I'm not sure it would be worth it to leave Canada as a nurse anymore if you're only making 18000 SAR a month. There is a major shortage of nurses here so there are sometimes signing and renewal bonuses, provincial loan repayment programs, and starting next year, federal loan forgiveness for those who work in rural communities. The projected starting wage for nurses fresh out of school in Canada is about $50,000 - $60,000 CAD (189022 - 226826 SAR) a year in most provinces and goes up to $80,000 with experience. If you're willing to work in a northern territory, the starting wage out of school is about $81,000 (306215 SAR) and goes up to $121,000 with experience. Northern provinces will also include signing, monthly, northern, and annual bonuses/allowances - you'd get an extra $33,600 in bonuses during your first year with more every subsequent year!

I am an Australian citizen with a South Asian background. I've done my Masters in Civil Engineering from New South Wales University in Sydney. I also have few years work experience in Australia. Can I expect a higher salary in Dubai than most South Asians.

Great post! I worked at KFSH in Riyadh ten years ago and saw the pay scales. Canadians do not get the same salary as Americans. Americans are at the top, then green-card Americans, and then Canadians. I'm Canadian, by the way.

Unfortunately prices have crept up so badly lately in KSA, that even a European with 16,000 SAR ( for example) can send nothing home!

Thus I think it is rather contradictory: if 16,000 SAR could allow for a decent life say in the EU, there is no way that you can live and spend in KSA and from that amount send something like 5,000 SAR to your home country and consider it still represents a decent life in Europe.

An average family of (4) would need to lead a rather conservative life in KSA to spend 10,000 SAR, excluding any specialised schooling for their children.

And then, not all companies give that much for schooling, which has also flown off the scale.

Pays Should be based on the Experience and Qualification... Not like racists...I have seen Americans and Canadians, who would have been kicked out of Job in my Country are getting more than those who are better qualified but from Asian States...Its Sad such Racism in KSA.( I have been in Saudia for 32 years-Since Birth)

The salary you mentioned about Filipino nurses is not correct. Based on the Department of Budget and Management website of the Philippine government, the salary of a government-employed Nurse as of July 2009 are the following:

Yes there is difference in pay rates according to nationality and some times race its a matter of demand and supply and all the do-and-da related.. this is understandable and can be rationalized in way as you said.

but what puzzles me is; if you're paying an american nurse 10 times the a Indian nurse with the same Job qualification, what is the added value ? blue eyes !